As Porn Copyright Story Unfolds, Law Firm Looking More and More Like a Bunch of Scumbags

from www.businessweek.com – Well, the story of Prenda Law isn’t over. People associated with the Chicago law firm have been accused in California court of controlling companies that buy and/or create pornographic films and then suing people for copyright infringement when they download them on BitTorrent, but no one really knew how the films got onto BitTorrent in the first place.

Graham Syfert [pictured], a lawyer who has represented defendants in cases brought by Prenda, has long suspected that the firm had uploaded the films itself.

“Almost all those shared files came from the same place,” he told me when I interviewed him in March. On his blog, Syfert detailed his suspicions that one user (account name: sharkmp4) was tied to several of the videos that Prenda sued over. To support his claim, which might encourage an Orlando court to make Prenda cover Syfert’s client’s legal costs, Syfert presented to the court the declaration of Delvan Neville, creator of a BitTorrent monitoring device, whom he’d asked to determine sharkmp4′s identity.

When Prenda filed a lawsuit for its clients, it often included a specific “hash value” associated with the alleged infringement. (A “hash value” is number that identifies the specific torrent file.) Neville reviewed a set of these hash values associated with Prenda lawsuits and found that they pointed to one common sharer, one possibly controlled by an entity called 6681 Forensics.

Fun fact: 6681 Forensics, which monitored BitTorrent and detected the copyright infringement, is managed by Peter Hansmeier, the brother of Paul Hansmeier, and its domain name was reportedly registered by John Steele. (Steele and Hansmeier founded the law firm that later became Prenda law.)

Neville also went on to conclude that 6681 Forensics and sharkmp4 were likely one and the same. Sharkmp4 shared videos through The Pirate Bay, which stores users’ IP addresses. As it turns out, the IP address associated with some of Steele’s Go-Daddy website accounts is the same one used by Sharkmp4.

“It’s the equivalent of jumping in front of a car to collect a settlement,” says Syfert, adding that the legal implications of suing someone over material that you yourself uploaded haven’t been clearly defined.

“I have a friend who just released a music record. If he’s lucky he’ll make $3,000 off it, but if this [is legal], he can put it up online, hire someone to monitor the downloads, and then suddenly his album is worth $1 million,” he says.

John Steele, reached by telephone, denied that he was sharkmp4. “I’ve categorically denied uploading a single torrent in my life,” he says. “Nor do I know anybody who’s ever used the shark thing.” But even if there were a “smoking gun,” Steele says, he’s not sure that, given the current state of U.S. copyright law, it really makes a difference. “If someone were to be found uploading the torrent that they owned, I don’t know what the legality of it would be,” he admits.

Prenda’s downfall is playing out as the Obama administration cracks down on so-called “patent trolls,” companies that buy up patents for the sole purpose of suing companies or individuals for infringing on them. That’s different from copyright infringement and features completely different laws, but a lot of the problems patent defendants face—high legal expenses, the difficulty of identifying a patent’s true owner—echo those of copyright defendants. The fact that the White House feels the need to act on the upsurge of frivolous litigation speaks to the difficulty of creating a law that successfully protects innovative ideas and work but also keeps people from turning infringement lawsuits into a money-making scheme.